By Angel Au-Yeung
In September, payments firm Block Inc. gathered 8,000 of its employees from around the globe to California for an extravaganza celebrating the company's 16th birthday.
The three-day affair took place at the Oakland Coliseum and Arena and had the air of a music festival rather than a corporate event, with a nighttime DJ set by Anderson .Paak.
Among the highlights: Block founder Jack Dorsey, clad in a black T-shirt with a chain necklace, held a chat on stage with hip-hop superstar Jay-Z, a Block board member. The event cost the company over $60 million.
Six months later, Dorsey announced plans to slash 40% of the workforce at the company, which owns Square and Cash App. More than 4,000 people were soon notified that they would be let go.
Dorsey, 49, cited rapidly improving artificial-intelligence models as the primary reason, fueling anxieties the technology was on the verge of wiping out white-collar jobs and devastating the economy. Just days earlier, a report that imagined such a future had sparked a market rout.
"Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," Dorsey said on a call with analysts as Block's stock soared.
Not everyone is buying it. Rather than leading American corporations into a brave new future, some Wall Street analysts say, he's capitalizing on a chance to slash costs at a company with excessive staffing.
What began as a company focused on card-payment systems expanded into buy-now, pay-later loans, Jay-Z's music-streaming platform and bitcoin investments. The company has improved the profitability of its core businesses, but some of its ventures are weighing on its balance sheet, with net income in 2025 down by more than half from the prior year.
"The vast majority of these cuts were probably not due to AI," said Dan Dolev of Mizuho Americas, noting the "significant amount of bloating" in recent years.
"This isn't an AI story. It's a workforce correction wearing an AI costume," wrote Jason Karsh, a former Block employee, on X.
Inside Block, employees had already grown accustomed to layoffs -- just not on this scale.
Block had gone on a hiring spree during the pandemic, when Dorsey -- who was known for a hands-off leadership style -- became even more absent.
Dorsey's lieutenants often clashed in his absence, leading to teams with duplicated roles and resources. The company had around 4,000 employees at the end of 2019. By the end of 2023, head count had mushroomed to nearly 13,000.
A series of missteps -- including a global outage at Square -- prompted Dorsey to take on a more active role at the company. He announced a large round of layoffs in late 2023 and then again in early 2025. When Dorsey announced the 40% reduction last week, Block still had around 10,000 employees.
Dorsey has maintained that the latest cuts weren't primarily motivated by cost savings. He acknowledged in a post on X that he had "incorrectly" built two separate business structures, but that Block's hiring partly reflected the increased complexity of the company's operations.
Juggling roles
Block is Dorsey's second stint atop a tech company. The young programmer -- sporting dreadlocks and a nose ring at the time -- was one of Twitter's co-founders and served as its CEO until 2008, when he was pushed out amid concerns he was distracted by his hobbies. In interviews, Dorsey has said he was ousted because he "deferred too much" to other executives.
Soon after, in 2009, he co-founded Square, the company that would go on to become Block. The idea came about after another co-founder, a coder and glassblowing artist named Jim McKelvey, couldn't sell one of his sculptural glass faucets because he couldn't accept credit cards.
To solve the problem, they created a square-shaped device that could plug into a smartphone's headphone jack and read credit cards. The company gave away the hardware and software for free and the system took off, particularly among small businesses.
When employees came up with the idea for Cash App in late 2012, executives wanted to kill the project in part because it felt too similar to PayPal's Venmo. Dorsey has said he kept it alive because he trusted the team leading it.
In 2015, Square prepared to go public. That same year, Dorsey took back the job as CEO of Twitter, which was based a block away. He juggled roles at both companies and started delegating more work at Square to his deputies.
Dorsey's personal life, meanwhile, started getting more attention. One year, he recounted the 10-day silent meditation retreat he went on in Myanmar for his birthday.
In 2019, his diet made headlines when he said on a podcast that he ate only one meal a day, to improve his focus. Later in the year, he spent nearly a month in Africa meeting with crypto entrepreneurs and declared his intention to move to the continent for a few months.
The Covid-19 pandemic brought those plans to a halt. Still, investors grew more concerned with his dual roles. Elliott Investment Management, the activist hedge-fund firm, launched a campaign in early 2020 to oust Dorsey as CEO of Twitter.
The pandemic crumbled Square's revenue as small businesses suffered. But Cash App exploded as users deposited their stimulus checks and unemployment benefits into their accounts. The app makes money in a variety of ways, including on instant transfers to bank accounts and short-term loans.
Square's stock shot up. Dorsey and other executives started hunting for acquisitions.
In March 2021, the company said it was buying an 86% stake in Tidal, a music-streaming service started by Jay-Z that was operating at a loss at the time. A pension-fund shareholder sued, alleging the company had breached its fiduciary duty. A judge dismissed the lawsuit but called the deal "a terrible business decision."
In August 2021, the company announced a $29 billion all-stock deal for Afterpay, a buy-now, pay-later firm. A few months later, the parent company was rebranded as Block.
Dorsey steps in
Dorsey left Twitter's leadership shortly before it was acquired in 2022 by billionaire Elon Musk. Soon after the takeover, Musk slashed thousands of Twitter's workers. The service was renamed X, and it had about 1,500 employees in 2023, down from around 8,000.
Dorsey stepped back in as Square's full-time CEO after a global service outage in September 2023 left business owners unable to access their accounts for two days. Previously, Dorsey had given himself the title of "Block Head."
Rolling layoffs began soon after. Dorsey doubled down on his interest in bitcoin and announced Bitkey, a hardware bitcoin wallet device . A unit to make chips and machines for bitcoin mining soon followed.
Today, both of Block's major business units are facing pressure. Square is competing with payment platforms including Shopify and Toast, while Cash App competes with players including Apple's wallet and PayPal's Venmo.
Dorsey's personal peculiarities also continue to draw attention. At a tech summit in November, Dorsey videoconferenced onto the stage, bathed in red light, during a chat with the co-founder of an AI voice generator. "It's sunset here, and I only have red lights in my house," he said.
In the past year, Dorsey has pushed his employees to use generative AI tools, according to people familiar with the matter. Employees are also expected to send Dorsey weekly updates, which he then summarizes with AI into general highlights and themes, the people said.
The depth of the layoffs announced last week were shocking to many employees. Others found solace in getting closure.
"For the past six months, the vibe at Block has been heavy with anxiety, and layoffs have been the hottest topic," wrote Cash App engineer Zane Wang in a LinkedIn post shortly after he was laid off. "Honestly, getting laid off feels more like a relief."
That afternoon, Dorsey hosted a companywide call addressing the move. On the call, he wore a hat with a word imprinted on its front: Love.
Write to Angel Au-Yeung at angel.au-yeung@wsj.com
(END) Dow Jones Newswires
March 02, 2026 21:00 ET (02:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments